Jan
18Consumer Debt Marches Further into Decline, Fed Notes
Tagged Under : Fed, Fed Notes
A recent report from the Federal Reserve System shows that the amount of consumer credit continued falling in November.
The report from the Fed stated that total consumer credit — which includes revolving and non-revolving types of loans — fell at an annualized rate of 8.5 percent, representing a total of $17.5 billion.
Revolving credit made up a large portion of that decline, falling by 18.5 percent in November. A large portion of revolving consumer credit is comprised of loans on credit cards, and the total amount owed dropped from $888.7 billion to $874 billion.
Non-revolving credit, which includes loans for cars and education, decreased by $3.8 billion, or at an annual rate of 2.9 percent. Although the percentage declines aren’t as steep as those seen in the revolving credit field in the past few quarters, the amount of non-revolving credit has dropped by $12.6 billion since the third quarter of 2008. In that time, revolving credit has fallen $101.2 billion.
As consumer credit continues to fall, the ability of people to pay off their debts will continue to depend in large part on whether they’re employed. Other numbers recently released by the government show that the unemployment rate remained at 10 percent in December, and many experts predict it will remain near that level for much of 2010.
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